JIDOKA

JIDOKA - the Japanese term meaning automation. In this form of automation the machinery itself is checking the parts produced for defects after processing. With this constant checking of process quality deviations can be directly detected and when defects occur the complete process is automatically stopped until the problem is solved.

You might have come across the word autonomation, which is simply a combination of the words autonomous and automation that describes the automation with still human interactions. JIDOKA has to be seen as a manufacturing principle rather than a methodology. The idea behind JIDOKA is that all machines in the process chain can run without a dedicated operator checking for process stability and quality outcome. If there is a defect or non-conformity of the process, the machine shuts itself down, preventing the defective parts of getting passed on the downstream process steps and for this reason it prevents producing scrap.

In the Toyota Production System, autonomation is one of the main pillar and is also known as intelligent automation as it is firstly focusing on the quality and the ability of a self running system rather than just focusing on the output. You might have also heard the description of automation with a human touch - if a deviation occurs the machine itself will stop the complete manufacturing process and only with the interaction of an operator, after the problem is solved, it can continue production. The upside is pretty clear - you will not produce any defective parts or waste value adding activities on non-conforming components.

With the use of the JIDOKA principle a number of advantages are coming with it:

• Processing of non-conforming parts is immediately noticed, so that neither scrap nor rework occurs. Furthermore, no defective parts are passed on to the downstream processes steps

• Since the defects are detected automatically, a 100% end of line inspection is no longer needed within the scope of quality assurance

• With the help of automatic error detection, operators are no longer needed to monitor machinery, which is no-value adding activity anyway, so it can be declared as waste in the form of waiting time

• Operators have now the freedom to perform multiple tasks during the same time or are able to dedicate themselves to new tasks at all

• Maintenance activities will also decrease as crashes or malfunction due to the passing on of non-conforming parts is avoided

• JIDOKA is the basis of analyzing the root cause of failures and implement sustainable counter measures to avoid these of occurring again

KAIZEN

KAIZEN the mother of all lean terms.

The word Kaizen is a combination of two Japanese words - KAI meaning change and ZEN meaning good. Kaizen is the epitome of continuous improvement and stands for the “change for the good”. Kaizen for your organization means continuous improvement involving everyone.

All together Kaizen is a collection of simple principles for improving your work but also stands for a management philosophy that has turned manufacturing principles upside down the way organizations think and act. The key of all success is that all employee should constantly critically review their processes and workplaces and improve them every day a little more.

You see Kaizen is a fundamental attitude for all players in your organization that results in high quality processes with zero defects on finished goods. Living Kaizen is the continuous strive to improve, simplify or optimize. This ongoing never ending process is therefore best known as the Continuous Improvement Process (CIP).

You can’t say that Kaizen is a methodology or tool, it is a mindset. I can’t emphasize this enough.

““The message of Kaizen is that no day should go by without any improvement in the company””

— Masaaki Imai

Kaizen does not depend on major innovations or fundamental changes, but on the everyday small improvements of your employees. The multiple suggestions for improvements paired with a rapid implementation mentality will show really fast their effect on success. The term of continuous improvement is fairly said just another way of the old fashioned suggestions scheme or idea management, which has a long history in the industry but less successful communicated and accepted.

To make a little list before writing too much I want to make it short. In order to pave the way for Kaizen thinking, a number of principles are linked to it, which should guide the thinking and behavior of all players in your organization.

• Daily small improvements in all areas of your organization

• Avoid any waste of material, time and money

• Consider all downstream process steps as customers and then improve performance and quality

• Improvements are always possible, it will never stop

• Constant improvements are made on a small scale and step by step

• No restrictions in terms of scope; products, services, processes, activities, technology, workplace - everything can be improved

• Different methods and tools can be used, the decisive factor is the effect, not the procedure

• Workplaces, work areas and the situation are viewed "on site", things are viewed and analyzed live (Gemba Walks)

• with constant improvements, higher and higher standards are set and made the rule

• Kaizen is a task for all employees in the company

All employees of your organization are directly involved in the Kaizen activities and everyone has to participate. To secure the success of Kaizen each individual should invest an adequate amount of time of their working hours in Kaizen activities and focus on their commitment on improvements. As your organization has different departments and by this different employee groups their Kaizen activities are different as well (e.g.):

• Top management has to introduce and promote Kaizen as the fundamental principle and drive and monitor its implementation. It creates the right conditions within your organization

• Middle management implements the requirements of top management and ensures that standards are kept. It also promotes the way of thinking by offering appropriate training

• Team leaders support employees in developing ideas and implementing them. They are responsible for execution and success confirmation

• The operators or administrators at the operational level work out concrete suggestions for improvement and implement them. This can also be done in small groups. Kaizen employees improve their specialist knowledge and experience by participating in further training courses.

To give you an example of daily Kaizen routines 5S seems the all time favorite.

You can read the full article on how to implement 5S here. But I will make a short excursion on 5S just to explain the way of thinking. 5S prescribes:

Seiri: Sort out all unnecessary objects

Seiton: Clean-up and correct arrangement of needed objects

Seiso: Keeping the workplace tidy so as to achieve the already established standards through 5S

Seiketsu: Establishing regulations for work standards

Shitsuke: Adherence to the Work standards and continuous improvement

Kaizen is always and everywhere its right to be applied.

Even when most of the people think that it is originally developed and deployed for the automotive industry (best known as the Toyota Production System) with clear mass manufacturing and assembly processes, there is no organization, yours included, that can not improve its performance and quality in terms of customer satisfaction, services, products and processes.

You see Kaizen has become a general way of thinking in all organizations and industries.

Thinking about organizations without Kaizen, you’ll see employees stick to rules and procedures with a “not my task” mentality. Only a few managers have to come up with fundamental long term changes. Kaizen on the other hand stands for the involvement of all employees and that everybody has to think every day what he/she can improve, simplify or optimize in his/her area of work for the “change for the good” of the complete organization, securing the long term success of your organization

YOKOTEN

Japanese term meaning “across everywhere”. With Yokoten the knowledgetransfer is carried out and all activities and countermeasures along the continuous improvement process are communicated organization wide and with other branches of the organization and its affiliates.

Yokoten is not just another Japanese word of the lean world. It might seem fancy to have only Japanese terms on the lean journey but one word isn’t that mainstream and well known but crucial when it comes to lean transformation in your organization. Yokoten describes the process of sharing knowledge across your organization. It includes systematics such as lead plans for copying and improving kaizen activities that work in your complete organization.

Think of Yokoten as horizontal deployment of improvement actions. The Yokoten approach is horizontal and peer-to-peer, with the expectation of Gemba Culture that your people go and see for themselves and learn how other departments or plants in your organization improved their processes. The idea behind is global knowledge transfer of improvement actions as basis for individual local solutions.

It is crucial that it is not a top-down thing where in all plants of your organization everything has to be the exact same. That simply will not work. It is more a benchmark where e.g. one plant in your organization is the champion of one manufacturing process (e.g. injection moulding). Therefore this plant is the “Lead Plant” and by this the benchmark for injection moulding organization wide. All other plants with injection moulding are welcome to the “Lead Plant” to learn from their experience and adopt the Kaizen activities to their own individual needs. With this kind of knowledge transfer a sustainable improvement and collaboration in your organization will be established.

In a nutshell, Yokoten can be understood as internal copy and improve. The role as senior manager is to spread the information and build bridges between the different locations/plants and give the transfer of knowledge a little jump start. Make your organization learn and improve from each other, most of the time there are already good examples out there and just want to be explored and further improved.

The long term success will prove that it is not the processes but the people that are continuously developed, that make the difference between a growing and successful organization or a simple copy cat of Kaizen activities.

The effective Yokoten process is a crucial brick for the foundation of a true learning organization. And no matter where you look at, truly successful organizations have a functioning organization wide knowledge transfer installed.

Supermarket

When speaking of a supermarket in lean context we are talking about an independent instrument that is used to control production. In a supermarket raw material and pre-commissioned components can be found in defined areas. The amount is well organized according the replenishment times of each component, in general the inventory is limited and components are refilled as soon as they are used. Following the Pull Principle with the help of the Kanban-System.

Concerning the supermarket we see it as one of the pull strategies that can be implemented as link between two process steps when developing the future value stream. The supermarket is the third option when firstly One-Piece-Flow and secondly FIFO are no options at all.
The supermarket is a great methodology to help your organization to manage a variety of inventory where you don’t need to know in what order the components will be consumed. Through the so called Kanban-Pull-System “internal customers” will take components of the supermarket, which are replenished by the internal logistics following the Kanban-Pull-Principle or in a pre-defined interval. With this integrated pull system of the supermarket as link between logistics and production you can also speak of a general replenishment pull system. But let’s have a look at the supermarket, what it can be used for and how it could look like in your organization.

The supermarket itself is a mix of FIFO lanes for different components stored in Mobile Racks or a typical shelf where components are stored in bins or on pallets. Let’s assume on workstation A 3 different components are assembled, in the supermarket 1 lane would be dedicated to only this component following the FIFO principle. With this explanation you can see why FIFO itself is preferred the supermarket. The supermarket is either steered with two bin principle or kanban cards. According the replenishment time, the replenishment is triggered with the extraction of components and the stock dropping below the minimum quantity.
You see, the key question is when to use a supermarket instead of installing plane FIFO lanes or even follow the One-PIece-Flow.

Here are some examples when this is the case:

• Two main material flow streams come together before or are split after the supermarket

• Your organization follows the made to stock principle, then the supermarket is at the end of production and stores finished goods

• With the help of a supermarket different lead times of suppliers paired with a high variance can be leveled and production can be smoothly supplied

• Upstream processes are lacking quality, downstream process steps can easily replace defective parts/components (interim solution until problem is solved)

• Different change over times, when a downstream process needs a change over the upstream processes can fill the supermarket as a overflow stock that is drained after change over is done

All of this examples have in common that the final target is to eliminate the supermarket itself and improving the material flow in a way that simple FIFO lanes or a Two-Bin-Principle at workstations can be realized.
The size of a supermarket is always determined by the components and their space needed for storage and their replenishment lead times. So it is a good piece of advice to have a clear overview of your components, their recurring demand including their replenishment times and don’t forget about a little safety stock on top.

As already mentioned there are two principles that are already well-known for implementing and steering a supermarket. The first one we have a look at is the Kanban-Principle and the second the so called Two-Bin-Principle, in which the bins itself trigger the replenishment.

A supermarket running on Kanban Cards can be seen shematically in the picture below. Every component stored in the supermarket is represented by an individual card, on which all required information is listed in order to trigger the replenishment process. The Kanban-Card can be seen as order slip for suppliers. Usually Kanban-Cards are placed on the so called Kanban Board. This kind of a supermarket can be seen most of the time.

The Two-Bin-Principle is a kind of supermarket where the bins itself are utilized the same way the Kanban Cards are used. In this approach all components have e.g. two assigned bins, filled with the dedicated components for this exact bins. The full bins are placed at the workstation, components are used and the empty bins are placed on the empty conveyor, ready to be collected by the Mizusumashi. the Mizusumashi refills the bins with the defined components and brings the full set back to the workstation. This kind of “decentralized” supermarkets are typically used for small and C-parts, which are consumed by not only one but several workstations, e.g. screws, washers, etc. as the financial impact of c-parts are low and the space needed is small.

In the end the supermarket is the last possible way to implement a Pull System after failing on implementing a One-Piece-Flow or FIFO. The target is and always will be to reduce the size of the supermarket by changing it into a FIFO system or change the material flow in to One-Piece-Flow. Therefore the supermarket can be seen as needed but temporary. The size of a supermarket is always defined by the size of the components itself, the replenishment time incl. some safety surcharge and the consumption lead time of the production. By simply removing or adding Kanban Cards or Kanban Bins the level of WIP can be adjusted.

Value Stream

A value stream includes all activities (value adding as well as non-value adding) in your organization that are required to deliver your product or service to the end customer.

With the help of the value stream you are able to describe all process steps required for the creation of your product or service, from raw material to the delivery of finished goods. With the Value Stream Map you are able to find potential sources of waste and try to eliminate those by concentrating on the value adding processes. Focus on customer needs and what your customers are willing to pay for. In the ideal state the your production is completely smoothed out and material as well as information stays in a state of continuous flow. Optimization of this state is always driven through productivity. Even when continuous flow is the ideal state, intermediate storages, work in progress or buffers are not evil and even can be a result of optimized material flow.

Push and Pull

To read the full article please go here. Push and Pull is a way in which you can optimize your production and produce according the value stream and flow principle when storages become tight or order books full. Just in time can avoid costly warehousing but gives you also a straight dependency on delivery performance from upstream processes or suppliers.

The pull principle describes the process from the customer's point of view. The order triggered by the customer pulls the components through production. With the push principle, the goods are pushed through production. The pull principle saves the storage of finished goods and thus also transport and search effort.

Quick Response Manufacturing Control

“ Quick Response Manufacturing Control” (QRMC) is a concept developed in the 90’s and describes an organizational philosophy which propagates the orientation towards the reduction of lead times as the primary target of all corporate decisions.

An approach was developed against the backdrop of the thinking that emerged in the 1990s, moving away from specialization and toward strong customer orientation and the resulting process-oriented organization, with the result that the entire organization was fundamentally transformed and aligned to the factor of time. Improved quality, lower prices, and greater responsiveness are accomplished as a result of the company's ongoing focus on the QRMC principles.

The concept of short lead times does not clearly stop when production reaches its limits; rather, all divisions of the complete organization must be incorporated into this strategy and align the targets, as determined by customer needs. Furthermore, this model allows for an outwardly adaptable and quick response to changing customer requirements.

Properties of QRMC

QRMC is distinct from existing "lean management" approaches, which are not in competition with QRMC but rather complementing it.

QRMC is appropriate for usage in businesses where production has the features of a significant number of variants manufactured in small batches with customer-specific characteristics. To make a decision if QRMC is the right approach for your business, see the following matrix.

A paradigm shift from the dominance of cost-based approaches and ways of thinking (e.g. unit costing) to measuring instruments is proposed, with the lead time for customer order fulfillment as the only essential indicator for controlling the overall material flow. It is vital to consistently use the four QRMC core concepts in order to successfully implement the QRMC philosophy in your organization in a durable and broad manner:

1. Time is crucial

2. Adaptation of organizational structures

3. Organizational-wide application

4. Dynamic toolset

Time is crucial

The common wisdom about work is that the quicker, harder, and greater you work, the more work you accomplish in less time. This mindset is represented in today's control systems, which consider "touch-time" control (value-adding activities) to be the most important component in time efficiency. Because the "touch-time" can be precisely measured without any doubt. And each and every controller assumes: Only what I can measure I can control. However, because touch-time lead times account for only around 5% of all lead time, the cost-cutting potential is modest as most of the time it is already squeezed to a minimum.

Furthermore, no matter what system you look at, the presumption of “faster, higher, further” only applies to a certain point, the break point. See it overstressing the the system. E.g. when the manufacturing input factors (5M) are pushed to their limits, the quality level will drop, toolings will wear out faster or even destroyed, in short: the system will collapse.

But to keep on going, how is the “non-touch-time” (non-value-adding tasks) measured. According the standard, cost-based approach, all expenditures for incoming and finished goods storage are covered including all overhead that is needed on defining processes on how and when a product will be produced. With existing traditional systems, these overhead costs are not really accurate apportioned.

As a rule, overcharges are utilized to spread this cost block among the things. Most of control frameworks don't correspond upward an ideal opportunity to the genuine causes. These overheads, then again, address the costs of time, or all the more explicitly, the expenses of lead times.

QRMC doesn't suggest that upward costs can be allocated all the more effectively, yet rather that more limited lead times mean lower upward expenses. The lead season of associations that attention on a QRMC technique is continually limited, permitting the organization to prosper in market significant numbers (e.g. delivery reliability or delivery time).

It may be challenging trying to begin utilizing QRMC approaches. Toward the beginning of a QRMC project, taking on the QRMC methodology and rules will prompt higher item costs.

The formation of cycle arranged hierarchical units eliminates the division of work into little useful work steps in free handling units (purported QRMC cells). The "autonomous working gatherings" work association standards are utilized in this QRMC cell's rundown steps. Inside the QRMC cell, multi-functional staff has a bigger responsibility, which is addressed in an expansion in "touch-time."

More modest clumps ought to be fabricated, as indicated by QRMC, to upgrade responsiveness. Thus, there are more set-up processes, which raise unit costs. Producing more modest bunches requires a higher recurrence of set-up processes, prompting more noteworthy set-up costs.

How does the lead time consumption influence you in the event that you can deliver on request and not in stock in light of the QRMC drive?

Cost decreases for distribution center terminations, as well as continuous structure uses, staff compensations for material dealing with, and deterioration costs, are completely limited. Notwithstanding these immediate consumptions, managerial expenses, for example, arranging and establish the executives have been brought down essentially.

Inventories ascend in esteem since they are not sold on the grounds that they are not created because of direct client interest.

All things considered, lead times brings down upward expenses. As opposed to the accepted problem of the following expense expansion in customary controlling, an increment in “touch-time" will subsequently bring about a general expense decrease, thinking about hierarchical QRMC structures!

Adaption of organizational structures

With a traditional and capacity arranged construction, an organization working in a confounded and dynamic market environment described by small batches, huge variations, customer specific goods, and intense competition can't achieve the objective of significantly bringing down the lead times. Accordingly, many errands have almost no immediate market reference; the longings of both outer and inner clients are just obscure. Besides, a capacity arranged association is wasteful, with long coordination and choice cycles.

Four areas of activity are determined to meet the points of "responsiveness to the customer" as a vital cutthroat component and leap forward into new aspects as far as adaptability and execution.

1. Change to cell manufacturing

2. Group liability rather than hierarchical control

3. Broadly educated workers > Qualification Matrix

4. Lead time as key figure

CELL MANUFACTURING

The solid consideration towards customers needs delivers a QRMC cell. This requires the mix of all capacities expected to meet customers assumptions, and henceforth focuses on a painstakingly characterized and limited market and additionally customer target.

Thusly, a QRMC cell involves the express task of man, machine, material, and procedure in a multi-useful structure, as well as their actual mix in one spot. Subsequently, outline work exercises are handled autonomously and completely to make a cell result.

Team responsibility

The drop from a hierarchical organization, in which those in control train e.g. operators what and how they should work, to a self-mindful organization inside a cell, is the following field of activity. Representatives plan and assemble their own corporate philosophies. The notable strategies for autonomous gathering work, like work revolution, work advancement, and occupation growth, come into consideration here. By working autonomously, productivity and product quality are improved endlessly. After totally planned requests have been finished; time is accessible to finish one more part of the QRMC hierarchical design: multi-practical employee qualification.

Multi-Qualified employees

At the point when workers are sick or on vacation, their obligations can be taken over and dealt with by different colleagues. This is the most quick rationale in broadly educating exercises. One more part of "cross functional qualification" is that weariness in positions is killed, and the scope of assignments turns out to be seriously captivating. This inspiration has an unsuitable clarification, however it is considered unreasonably quickly. Other key explanations behind "cross functional qualification" with regards to QRMC includes:

• Subject to the every day bottleneck, the obligations in a QRMC cell are incredibly adaptable. Various requests might happen at various stations inside the cell, expecting operators to work on an assortment of assignments consistently. The multi-qualified operators upgrade the cell's adaptability, empowering bottlenecks to be kept away from.

• Advanced machine parks don't constantly request the full focus of operators. Subsequently, the operator should be qualified of handling different machines at the same time.

• Long-term continuous improvements of process steps inside the QRMC cell are much of the time achieved because of the different work volumes.

Lead times as key figure

To evaluate the cell's performance, the lead time must be utilized and assessed frequently. Overhead costs can only be lessened by concentrating on lead times and the consequent suffering pressure to lower it.

The lead time is defined as the major goal as a result of this knowledge. On the 2nd layer, standard indicator systems and performance indicators do not need to be updated; instead, they operate as assistance and control function. The QRMC number can support this targeted orientation on cell level.

The following formula is used to compute the QRMC number:

Q "RM - Number "= "Lead Time reference period" /"Current Lead Time" ×100

Two points must be predetermined for a sufficient implementation of this new measurement technique:

1. To commence, the cell must clearly control the start and end points of the lead time measurement ("When does the time starts to run?"). Only when the cell has both the necessary material and the order release, for example.

2. The time, on the other hand, should only be monitored if the cell has absolute control over the associated time. Only those aspects of the cell's team that it has command on can be assessed.

As a result, employing the QRMC number has a variety of benefits:

While the assessment reveals a falling curve when appropriate measures to minimize the lead time within a cell are adopted, the graphical display of the QRMC number shows an ascending graph. The cell crew is much more inspired by increasing graphs than by dropping graphs.

Smaller lead time reductions at a later period are awarded more than greater lead time reductions at an earlier time by the QRMC number. This is demonstrated by the fact that lowering the lead time from e.g. 1hr to 30min is more difficult than cutting it from 3min to 2min.

Lastly, the QRMC number creates a dynamic competition within the organization, allowing teams and cells to monitor and analyze their progress in lead time reduction.

Organization wide application

In order to adopt the QRMC approach in your production areas it needs to be rolled out in the complete organization.

The fields of administration, purchasing, and product development are clearly referenced. As previously stated, it is also essential to minimize the interfaces by remodeling the cells to QRMC cells. Moreover, conventional process optimization techniques can be abolished, parallelized, integrated, or altered.

Planing your production with QRMC

A Material and Resource Planning (MRP) system helps you with production planning by assessing material requirements, initiating order proposals, and executing orders based on delivery dates.

The MRP system, on the other hand, is only as good as the employees filling it with information. In contrast to the processing time, "buffer times" for the order term are frequently scheduled to ensure smooth workflow and overcome planning flaws. The parameters for an MRP system are fairly straightforward after rebuilding the organization to QRMC cells. The MRP system is used to carry out greater cooperation and scheduling of the material flow from the supplier via the QRMC cells to the end date.

The system uses conventional logic based on lead times to regulate WIP levels, material orders, and backward scheduling by delivery date. The lead time is determined using the QRMC cell's lead time rather than the processing timings for every processing stage.

The MRP system is not used to manage micromanagement for each particular machining phase; this is performed by the cells independently. This implies the MRP system will be simpler, and the buffer times associated with each machining process will be shorter. Adjustments in the lead time as a result of cell optimizations are communicated back to the MRP system.

To synchronize order planning in QRMC systems with several QRM cells, a "capacity forecast" system, the so-called POLCA system, is initiated.

The POLCA (Paired-Cell Overlapping Loops of Cards with Authorization) system relies on the QRM cell structure and guarantees a constant flow of information among two cells. This prevents production from causing material blockages in the next cell. As a result, WIP accumulate between both the QRM cells. POLCA straightens out the varied capacities and lead time per cell, inhibiting the development of these "buffer or backlog stocks."

Due to planning in the MRP system, POLCA only operates on an order if it is required and genuinely needed POLCA aids in the identification of highly frequented bottlenecks in the system, narrowing the range of optimization techniques.

Coming to an end

Through the adoption of the QRMC methodology and its effective implementation, not only are lead times lowered, but also overhead expenses are diminished tremendously.

Additional effects include increased product and process quality, and also high variability against short-term market shifts and fluctuating client behavior. Customer responsiveness in today's marketplaces, with the appropriate items in the right location at the right time, is a crucial component that will result in greater market share. Cost savings and sales growth can both be achieved with QRMC.

In todays and tomorrows competitive market, a strategy that guarantees organizations are more competent and durable.

Stop the line authority

Stop the line authority describes the ability or permission of operators to stop the process when a deviation or problem occurs. By doing so it is prevented that defective parts are passed on the downstream process steps.

A typical example are so called “Andon cords“ that can be pulled to immediately stop the process and inform the supervisor. To read more about Andon itself go here.

When you are in the lean world you might have come across the famous Toyota quality control mechanism “Andon Cord”. The cord is a simple tool to alert others of deviations or problems in the production line, at Toyota everyone has the authority to pull the cord. By pulling the cord almost instantly production will stop and give the alert to responsible supervisors that there is a crucial issue that needs immediate action. Following the lean principles and shop floor structure, a supervisor would step up and help the operator reviewing the deviation of product or process and define counter measures. When doing so and working with an A3 Problem Solving approach, the supervisor is coaching through the problem solving process and shares with others the outcome or lessons learned on how to prevent this failure of happening again.

In Lean Manufacturing - pulling the Andon Cord is emphasized to all operators. The target is simply to block all defective parts from leaving the company and reaching the customer. At the same time it creates the opportunity to improve your processes to prevent future defects.

NEXT STEP: GO GEMBA

Instead of explaining you the complete principle of Gemba Walks here the short version. But if you want to learn more about Gemba Walks go here.

You can discuss problems as much as you want but when you don’t get yourself to see it, it is worthless. This is where the Gemba Walk comes in the game. Gemba is a Japanese term and stands for “the place where it actually happens”. This can be everywhere and everything in the process chain, but by pulling the Andon Cord the place is defined.

Key of Gemba is not to talk in wild theories or totally abstract about problems, but to have a look where it occurs and discuss them on site (looking at the process in the real world, get rid of unnecessary power points and excel sheets! Nobody cares anyway!) Too often we want to believe the statement of an “expert” and forget about it instead of going there and have a look ourselves in oder to gain a better understanding of the problem and make up our own opinion.

VISUALIZATION

When you are at the place of action, make sure to bring an A3 with you. Make sure that you describe the process properly and the failure that occurred.

In the lean manufacturing world the best known use case of the A3 report is the problem solving report. In this case the responsible person from the quality department takes the A3 report, starts the problem solving actions and follows a systematic structure that makes it possible to describe the effects that are currently leading to a deviation from the standard. Using the A3 only makes sense when you don’t know the root cause yet. If you already know the root cause don’t waste your time. Fix it and go back to normal.

Key Questions are with Gemba Walks and A3:

1. What should happen?

2. What is happening?

3. Explain why!

The A3 Report is foldable and can be then placed at the line or the work station. This is a great and a standardized tool to visualize that a problem is known and on the watch list.

LAST BUT NOT LEAST - STOP THE LINE (JIDOKA)

Now it is time to tackle the hardest part for all players in your organization: STOP THE LINE. In Lean Management, the original term is the Japanese word JIDOKA. This concept is driven by the maxim to have the best quality of goods and to bring the potentials out of the processes or products through continuous improvement. You have to stop all production when a deviation occurs and implement effective counter measures before restarting the line.

On the first view stopping the line might sound hard and insane, as you will stop all value adding activities and actually stop shipping goods. But think about it again. Failing to solve problems when they occur will force you to pile up your inventory with non-conforming parts that will need rework before shipping. You will bind additional resources in space and workers and by that you will burn money. Finally it will keep your organization away to improve and move forward with the developments of the market and with your competitors.

This is exactly the point where the principle of continuous improvement comes in the game, where you see all deviation as an opportunity of improvement.

To practice and learn more about continuous improvement and the CIP methodology, go ahead and read the CIP article here.

If you can’t measure you can’t control

Make sure that you have an organization wide monitoring in place which provides you with all KPIs necessary to run your business. Line stops and counter measures will be part of the tracking process in order to understand if the counter measures are effective, gain a better understanding of the processes and documentation of the improvement process itself.

1. What is the deviation?

2. What are the measures implement?

3. Are the counter measures effective?

You see there is again the logic of PDCA in the continuous improvement process.

All this information will be than part of the Shop Floor Mgmt. to get the information throughout the complete organization and to make sure that all players have the same understanding in what direction your organization is heading.

Smoothed Production

The topic of discussion today will be the so-called smoothed production. It is integral for customer satisfaction as it is a part of the ordering and complete fulfillment process. It makes sure that the supply chain capabilities are enough for stable production.

Smooth production benefits you by having a proper influence on your workplace configuration. It does this by helping to create a stable output with optimized inventory via a pre-condition. This presupposition/pre-condition simplifies your workplace based on the following conditions:

• Standardized work processes

• One-Piece Flow within the workstation

• Complete processing

• Stabile customer TAKT TIME

• Minimal TAKT TIME loss

• Maximum Output

• Flexible deployment of workers

• “U-Shaped“ layout

• Set-up time optimization

• Quicker material change

• Two-Bin-Principle

The smooth production is structured in the following:

• Planning Strategy

• Constant lot sizes

• Stabile material needs

• Fixed production times

• Flexible inventories

• Fixed timelines

• Higher delivery dependability

It is implemented by:

Material flow

• Scheduling methods

• No part shortages

• Pull-principle

• Supermarket

• Route traffic

• Small containers

Warehouse Organization 

• Full transparency

• FIFO-Principle

• Minimal warehouse levels

• Set assembly

• Bar codes and Data Matrix Codes

You may be asking the question, “but why do we need smooth production?”

It is a well-known fact that smooth production has many veritable advantages. With that said, there are also some potential drawbacks, but those can be eliminated or at the very least mitigated in the implementation phase. 

Here are some of the benefits and drawbacks of smooth production:

The next question you might be asking is, “how does one implement smooth production?”.

Following are some of the requirements for smooth production:

• Variable worker allocations should be the basis for the production power of the system. The variable shift models are first optimized for maximum output and then implemented specifically.

• Two factors determine the minimum inventory of safety stock for a part number. The first is the variability in customer ordering habits. The second factor is the degree to which the program is successful in the production line. To hit the right spot between these two factors will require systematic optimization with the help of a mathematical model.

• To determine what the maximum inventory of each part number should be, we should look at the delivery cycle of that said part number. This is essential for weekly pick-ups or delivery.

• The production equipment inventory should be in accordance with necessary tool changes and set-up times.

• The weekly production plan should be consistently released to the concerned parties once the production macro planning has been finished.

• An information board at the assembly areas will contain all the planned orders.

• The material requirement determination should solely be on the basis of the production plan.

• Assembly areas should be designated for the online measurement of production units. A data matrix system should be implemented for reducing errors in the documentation process.

• The ability to control production is a must if there are any noticeable short-term reactions arising due to discrepancies between the expected outcome and the actual outcome of the production plan.

• Any daily deviations must be dealt with proper countermeasures. The production plan must be flexible enough to allow time to deal with backlogs. Meeting shipping deadlines is the primary goal.

• A time-saving approach must be implemented in moving full racks from assembly areas to warehousing. 

• The requirements of the long-term sales plan should be integrated into the production plan so that production capacities and worker allocation are determined. 

• It is imperative that order calling and Just-In-Time delivery schedule data be automatically transferred to the resource planing system so that production planning can be done.

• The production planning for the system will determine the specific production calendars with your organizations shift models. 

• All underlying data in the system must contain related shipping dates or the dates can be transferred from the demand data as well. 

• To control the complete system, the updated inventory trend with planned shipping dates, for example, weekly and monthly, should be represented graphically.

• All possible scenarios should be simulated, because it is important to determine optimum capacities, performance, etc. for universal or shared production areas.

So, what factors make smooth production successful?

The two factors are planned output realization and controlling of supply

1. Production plan fulfillment as a part of planned output realization (source: Information board at production area as part of shop floor mgt)

2. Performance grading of workers in the production area that is done on the basis of the number of Dollars created in exchange for optimal material usability and worker effort (whether overtime or temporary workers)

3. Material usability of purchased parts, WIP, and raw materials when assembly time bears the cost or parts become short (Source: Information board at production area as part of shop floor mgt)

4. Special trips for the respective assembly area as a truthful Dollar figure

5. Supply capabilities and service grade for finished goods are measured using the number of delivered parts and the number of delivery dates met as a result of customer requests when demand data is transferred. (Source: Information board at production area as part of shop floor mgt)

Alternative measures for the success of smooth production:

• Usage of constant customer feedback to determine customer satisfaction as used by companies e.g. from the automotive industry 

• Iterative comparison of customer feedback with important shipping and delivery figures

• Target values of no customer feedback are used to get parameters to measure with

With the help of Kaizen workshops in conjunction with the introduction and implementation are used to create optimal basic parameters of success:

• The finished goods inventory levels are available transparently to be used as an early warning signal

• A minimal failure rate is strived for in the overall process of making sure of data from the production and logistics division

• Over-production of products is reduced by ensuring that upstream assemblies are only producing the right amount of product to be used by the downstream processes

• With the implementation of workshops, the set-up time can be reduced drastically

• Constant reduction of purchase parts does not diminish the availability of the material in the production line while also reducing downtime 

• Optimal balance is achieved for assembly lines and areas and the requirements are met for variable worker allocation

• The specifications of operator qualification shall determine how the qualification and training of workers should be conducted

• There has been evidence of improvement in production flexibility in comparison to the past

Deviation Management

Deviation Management is simply said the pure ability to identify deviation of a process according to the standard work process and you have a structured approach to tackle that issue.

5 Reasons to work with Deviation Management

1. Improve compliance and ownership of defective goods or processes

2. Continuous feedback to operators and staff of their deviations

3. Structured process for deviation documentation, tracking of counter measures and problem solving

4. Prioritization of improvement measures

5. Data collection to engage external suppliers and customers

Lighthouse Project

When talking about Light House Projects this means nothing less than that a small sector of your organization e.g a department is already turned around. By that we are talking about living already the ideal state, that you defined for the complete organization.

Processes and structures can be seen as guidance for your organizations’ lean journey. It provides directions, shows what is possible and therefore is the kickstarter for a successful roll-out as people can convince themselves with their own eyes.

Just keep in mind that the lean journey with its process of continuous improvement is never over. The pioneer has to lead the way.

Key Performance Indicator

Key Performance Indicators are measurements utilized to indicate the performance level or progress with regard to important objectives or defined success factors within your organization. To make it short KPIs are used to track or monitor the progress of your existing daily management system.

So how do measure our progress of our organization? How can we define what type of indicators we should use and what they tell us about the current state of our processes? And so on…

These are just some questions that might rise when thinking about implementing KPIs in order to better understand your organization and define a path to go for improvements. What processes are truly adding value to the final product or service the customer is willing to pay for and what is just waste?

Before you start implementing KPIs in your organization a helpful way is to categorize KPIs in two ways: leading and lagging indicators.

Leading Indicators
Leading Indicators are Performance Indicators that are tracking your process. So these are real time figures showing you deviation to given standard or if there is something missing in order to produce your goods or services. They have a real time effect on your delivery performance. The fun part with leading indicators is that you have real time results why it can also take months for a report showing how your organization is doing in general.
For example, talking about injuries, when an operator is involved in an accident during a process step. This incident will be documented on an incident rate report of the organization, for e.g. factory. So when you think about it you recorded an incident after it happened. This is a necessary process in the majority of organizations due to governmental regulations and safety laws. The question to ask is now what do you do with this information? Do you really know what caused it? The information is quite old. This is why the incident report is not a leading indicator but a lagging indicator.

Lagging Indicators

As just mentioned Lagging Indicators are result-oriented, because of this they are shown after something happened. With lagging indicators you react after an amount of time as you are reacting on something that is already in the past. Coming from automotive this is typically a customer claim in the field, you will have a lot of work to do to find out what actually caused the failure, if no proper traceability is installed. Attention: With those failures it is often miss leading that through assumptions symptoms are fight that are not real. Everybody from Task Force Managers to shop floor firefighters knows that. In this case you are not adding any value nor do you implement a sustainable solution.

Having this two categories in mind we can say that the majority of KPIs are lagging indicators. This is not only in the field of manufacturing. The most miss leading assumption thereby is that with Lagging Indicators we get the most information.
But openly asking - isn’t it better to prevent the accident before it happens? This is absolutely speaking for Leading Indicators - and by focusing on Leading Indicators your focus in daily operation will shift to your process and not the overall outcome. In fact: when focusing on improving your process as a side effect the overall outcome will increase automatically.

Where to start with KPIs?

First things first - don’t overdo it!

Start to ask yourself what is your daily business? What processes are constantly and repetitive in use? The same principle with Gemba Walks go to your employees and talk to them - ask what is doing well and what not. What can improve their work?

The situation can be daily checked with line reviews or the so called meeting cascade. Where on the lowest level with the shift hand over performance KPIs are reported and issues during the shift are addressed. This figures are then visualized on the e.g. “Cell Board” near the outline of the cell itself. Typically if you have an U-Shape Layout at the spot of raw material and finished goods.

If something goes wrong latest after one shift the focus will be on this process. This automatically prevents new incidents from having a threatening impact. This is the advantage from getting things done right away or afterwards when the game is already over.

Finally to bring it in a nutshell, try to bring your KPIs from lagging into leading. This will shift the focus on the whole organization towards daily processes and improving them with the help of daily Kaizen activities. Measuring the process constantly in real time gives you the opportunity analyze trends and adjust processes to be ahead of the game instead of being surprised by the market.
Analyze your data existing decide what to go for. Implement your KPIs and make sure they go hand in hand with a meeting cascade. This ensures the consistency of data used and that they are actually used to trigger actions. Based on the KPIs you will be able to drive focused improvement actions through shop floor management, visual management, standardized work and structured problem solving.

Visual Management

Hej there! Great to have you back! In this article we want to show how visual management can help you to keep track in daily operations.

Generally speaking Lean Management can be seen as a clearly organized workflow that defines the way your organization should work following given principles. Above all principles existing lies to avoid waste in any kind following the 5S Principle as foundation: 1 Sort out 2 Set in order 3 Shine 4 Standardize 5 Sustain.

For a clear visualization of running process in your organization, cleanliness and orderliness is the main part of it. Clarity of your processes on the shop floor is the foundation for all lean manufacturing activities. Having the clarity the implementation and maintaining of visual management methods will guide you to a real state of flow.

In the following we want to describe key basic visual management elements that every production, following the lean principles, should have.

Boards, Notes, Infographics, Brochures and even Movies

Don’t panic and try to explain all those Japanese words it works well without being too technical. Many instruments of the Lean Manufacturing Methodology are very useful to raise the awareness of your employees about lean management. Once implemented and continuously driven by the management the incentives are there to drive daily improvement measures.

The target with visual management and those methods are all the same:

1. Create transparency

2. Visual representation of procedures processes and services

3. Making problems (or bottlenecks) visible

Kanban Boards

Kanban can be literally translated as “card” in the context of a production system. No matter what processes you have, it all starts with a customer’s order. The Kanban card is then used to inform upstream processes about the need of materials, pre-assemblies or process steps. This automatically leads to a cycle that triggers itself through the complete value creation chain.

This is the so called pull principle the advantage if this principle is that, in best case, you have no work in progress which means you have no stock of semi finished goods built up, because only what the following process steps need is produced.

A3 Reports

The term A3 Report comes simply from the size of paper which is used for the documentation of the report. The structure itself follows the PDCA methodology.

The A3 Report is the representation of a problem to be solved. In this case the responsible person from the quality department takes the A3 Report, starts the problem solving actions and follows a systematic structure that makes it possible to describe the effects that are currently leading to a deviation from the standard. Using the A3 only makes sense when you don’t know the root cause yet. If you already know the root cause don’t waste your time. Fix it and go back to normal.

Andon: Lean management with boards and ripcords.

Andon again a Japanese word meaning “lantern”, at least in the context with lean manufacturing. It is a visual aid that is there to draw attention to problems on the shop floor when machines or processes are causing defects or simply stop working.

You might think you have seen them all by walking through production and seeing all those PLC signal lamps indicating green or red, but there is so much more. Just have a look at the Andon article.

Just want to name administration, maybe there is nothing to indicate, but when you think about a document that is needed in a different department, waiting for this is one of the TIMWOODS MUDA. The time waiting is probably the best indicator to start with lean admin activities.

Andon Cords - Please pull the rip cord in an emergency!

Andon Cords are rip cords or a simple button straight at the operation on the shop floor that gives the operator in the process the possibility to instantly stop the line when problems or defects occur.

Andon Boards

Andon Boards are displays or nowadays mainly TV screens that are showing the actual status of the manufacturing line e.g. PPM, down times, etc. Typically it is automatically feeded by the machineries of the production line. With the standard defined color indication everyone sees if they are doing great or not so great. In the second case an automated alert to supervisors or maintenance is triggered.

You see there are many possibilities, but the target is always the same. One hint at the end: Make your boards, infographics or brochures as simple as possible! (or just use mine ;))
WHY? As with processes > it is only a good process when you can’t cut anything more away from it. In other words: What is the value you get from something that nobody understands?

If you take the principle of visual management seriously it will help you to bring all processes in your organization to live.

Pareto Principle

The Pareto Principle describes that 80% of problems can be closed with 20% of the causes. This principle is named after Vilfredo Pareto who found out that 80% of Italy’s wealth belonged to 20% of the population.

With this in mind it is worth to have a look at it.

Let us start with an assumption, according to the Pareto Principle it allows us to assume that

• 20% of input creates 80% of the output

• 20% of customers create 80% of your revenue

• 20% of causes create 80% of failures

• 20% of your employees create 80% of sales

• and so on…

But before you run away now and think you have the answer hold a second. With the 80/20 rule you might tend to say that it always have to be 100 - it’s not. Make a deep analysis before making such statements! 20% of your employees can also make only 20% of sales or 60%. So before you fire 80% of your employees keep in mind that the Pareto Principle only gives you an idea on the distribution.

The whole idea behind it is that most things in life are not distributed evenly!

When we talk about value adding activities and the final product is 100% What is with all the necessary tasks, that are not adding any value to the final product but have to be done to run the company.

Or think about failures and finding the root cause, where to start to take actions? This is great when you think about a Failure Pareto and you want to satisfy your customer as quick as possible. Of course you are focusing first on the most failures and most of the time - not always - the other failures will disappear as well.

But most important of all, your customer gains trust in you that you have the competencies to do the job.

The key point is that most things are not in a 1/1 actio = reactio relationship.

So what can we use it for this 80/20 rule?
The Pareto Principle in first place supports you on realizing that most of the outcome are based on a minority of inputs. This means:

• 20% of input creates 80% of the output > try to reduce those non value adding activities

• 20% of customers create 80% of your revenue > install a key account manager that the customers knows he/she is important to your company > your customers success is your companies success

• 20% of causes create 80% of failures > Focus on fixing those failures first

• 20% of your employees create 80% of sales > get those employees a reward

We could continue on and on. To bring it to the point > focus on the 20% and not on everything at the same time.

Some examples that might help you for a better understanding:

• Instead of spending a whole night to prepare a presentation and thinking about where to start > focus on one topic and do it. You will get a feedback anyway during the pitch. This feedback gives you the chance to take it and improve it.

• Instead of focusing on one solution that might be the best and go through all the details. Make a list of three and go through the pros and cons with your colleagues that probably know the topic better anyway and based on their opinion make a decision with what to go on.

Maybe this examples are nuts for you but we want to emphasize that you should focus only on the important 20% and forget - for the moment - the other 80.

Last but not least - the Pareto Principle is not a law of nature it is a guideline to steer your focus and to save time on problem solving or simply getting your job done faster.

FMEA

Failure Mode Effects Analysis - FMEA

The method of the FMEA - Failure Mode and Effect Analysis has been used for years in the automotive and manufacturing industry.

The risk analysis framework has been applied in a wide range of industrial sectors. The first areas of application were traditionally in product development. Based on this the integration of the production process planning and the production. In the automotive industry, the joint creation of FMEA for products and processes by Today customer, supplier and subcontractor are a natural part of a cooperation. 

The user is guided through the "10 Steps to Creation of the FMEA".

Step 1 - Review the process

• Use a process flow chart or an already existing value stream map to identify each part of a process

• List all process steps in a FMEA table

• If you think the list gets too long it might is. Use this chance to split up the process and cut the elephant. It makes more sense to work on smaller parts of the process instead of getting lost in the woods.

Step 2 - List potential failures

• Review all existing data and documents that can give you a hint about each component that can lead to a failure

• After having a complete list try to cut it down and to combine the parts of the initial list

• The chances are high that you will identify several potential risks of failures for each component

Step 3 - List potential effects of failures

• The effect is the outcome of a failure on the finished good or a process step

• It is common that not only one effect will occur for a single failure, don’t be suprised

Step 4 - Assign the level of failure to risks

• This is based on the consequences for each failure

• Think about the ranking as the worst impact that it can have

Step 5 - Assign the possibility of occurrence

• How high is the possibility of occurrence

• What impact will it have if occur

Step 6 - How can it be detected

• What are the chances that you will detect the failure before occurring

Step 7 - Calculate the RPN (Risk Priority Number)

• Severity (S)

• Severity x Occurence (S x O) = criticality

• Severity x Occurence x Detection (S x O x D) = RPN

Step 8 - Define the action plan

• With the decision making process followed by the prioritization from the RPN (Step 7) focus on the topics with the highest RPNs

• Follow a classic action plan by defining who will be doing what till when

Step 9 - Take action

• Get things done!

• Implement the defined improvement actions

• Follow the PDCA principle

  • Plan - done

  • Do - right now

  • Check - Step 10

  • Act - loop starts over

Step 10 - Re-evaluate the RPN

• Time to check on the impact of your actions

• Re-evaluate each potential failure identified and determine if the improvement measures have an effect or not

• If not follow the PDCA and start over with step 8

The FMEA is linked to all CIP and Kaizen activities - there is always something to improve.

Ergonomic Workplace

An ergonomic workplace is a work system that considers the ergonomic aspects of an operation and the operator such as the operator’s hight, range and reach with the goal that the operator does not need to bend or turn.

The ergonomic workplace goes hand in hand with the work improvement.

Definition and purpose

1. Reveal waste increasing cost and not adding value.

2. Find waste in the movement of workers, eliminate/improve, pursue net work adding value.

Worker Movement

Lean Manufacturing and Ergonomics may have different roots and directions but together they can complement each other and define a more efficient and safer workplace.

One of the best person known for focusing on productivity and efficiency in manufacturing processes was Henry Ford with the invention of the modern assembly line. Ford really was focusing on eliminating waste and to cut down unnecessary costs in relation to the manufacturing of his cars.

Toyota is one of the best known companies that has stretched to the maximum the idea of Lean Manufacturing and is now holding the pole position when it comes to the reputation according the elimination of “waste”.

By looking at the Lean Model as well as Work Ergonomics, you clearly see the necessity of both practices in the industrial workplace, as well as observe that both can complement each other. 

The 7 types of waste to eliminate include:

• Transport

• Inventory

• Motion/Movement

• Waiting

• Overproduction

• Overprocessing

• Defects

The list of TIMWOOD is what Toyota has defined as the seven major types of wastes or non-value-adding activities. The seven wastes do not add any value to the product and the customer in the end is not willing to pay for it. Therefore it is essential to remove as much waste as possible which will have also an effect on the ergonomic workplace and furthermore on the health of the operators.

Some of these things like transport, waiting or unnecessary movement can be reduced to a limit what the operator still needs because as human being the operator is limited by his body.

The Lean Manufacturing initiatives and workplace ergonomics stepped into the manufacturing world at different times and therefore are not fully integrated. But you are perfectly advised by combining the principles of Workplace Ergonomics with Lean Manufacturing initiatives. Through a cooperative assessment and teamwork you have the chance to complement each other in making the workplace more efficient and a safer place.

Blue Ocean Strategy

Innovation for New Markets

The blue ocean strategy leads out of the shark tank: instead of copying the competition, companies find new markets.

Blue Ocean strategy: Off to new markets

Which company does not dream of an untouched market? And how many companies are stuck in the constant, sometimes ruinous competition and are treading on the spot? In order to escape this fierce struggle for survival, a rethink is necessary: If your own market or the market you are aiming for is too fiercely contested, you create a new one.

Opening up new markets is the core idea behind the so called Blue Ocean Strategy. To explain it simple the Red Ocean stands for existing markets where the sea is full of blood and therefore red, the Blue Ocean is the untouched, sweet spot of sea where nobody was before you.

I think we don’t have to discuss the obvious advantages of an untouched market. At least in the beginning you won’t have any competition. Your organization can act instead of react which automatically gives you higher turnovers and returns. But it is for sure not risk free, failure can get you everywhere. And even worse you will swim all by yourself not finding any customer and starve to death or die of thirst.

Customer Centric Focus

The Blue Ocean Strategy comes with several tools with which your organization can create new business cases. What they all have in common, is the focus on the customer benefit, regardless on the how to sail the blue ocean. Just think about technological innovation.. typically driven by making the customer lives more comfy.

Analyze and reposition your offer

The Blue Ocean Strategy first starts by analyzing your existing offer, which has to be done from the customer perspective. This is followed by the competitors analysis, what do they have that customers buy their products instead of ours, what is the extra value? The outcome is then recorded in a so called value curve.

The next step is the usage of the so called ERIC square. A typical tool to redesign service offers of drive product developments. The Blue Ocean gets a shape.

The E stands for Eliminate: What existing features are obsolete for the new use case?

The R means Reduction: What is important for the customer but can be reduced to an absolute minimum without being kicked out?

I for increase: What product features should be raised above the existing standard?

And finally C for Creativity: What awesome features does the customers want but don’t know yet?

A slightly different approach can also be the use of the Osborn Checklist, but won’t be covered in this article.

Creating Blue Oceans

Let’s face it, you can have the best product in the world, but without a market it is worthless. This already indicates the crucial factor of success of a blue ocean strategy, e.g. creating new markets or at least expand the existing one. To help you getting to new markets six paths can be taken:

Are there existing strategic groups in the industry?

Are alternative fields of operation possible - and if so, which ones?

Is there a potential target group that has been ignored so far?

What are the new mega trends that others haven’t recognized yet?

Are there complementary services or goods that nobody has on the radar?

What functional or emotional motives would customers want to buy the new product from?

Following these questions already shows you that the Blue Ocean Strategy rarely ends up in a completely new and disruptive product. The reality is that different product features are combined and given out to the market as new release. That is for sure not the idea behind the Blue Ocean Strategy, but used for it. The benefit of the Blue Ocean Strategy is to turn non-customers into customers. These folks are your blue ocean.

Have a look on Show Stoppers
Like with all theories, the Blue Ocean Strategy seams quite simple. But no matter what and how you do it, make sure to have a clear and transparent communication throughout your organization. Everybody has to be on board and support the planned journey, otherwise chances of getting stuck at the harbor and not setting sail are quite high.

And finally, when set goals or targets think about SMART, most important > it has to be realistic - can’t say this often enough.

Checklist: Blue Ocean Strategy

In summary, the following aspects must be taken into account in the Blue Ocean Strategy:

1. A saturated market with predatory competition does not permit growth.

2. A new, unrivaled market is created through beneficial innovation.

3. The existing offer is analyzed from the customer's point of view.

4. A new range of services or features is created.

5. Employees in the own company are involved in the implementation.

PDCA

The idea behind the PDCA cycle is to empower employees to independently identify and solve problems. It is also a crucial element of the continuous improvement process (CIP).

Many projects in which a culture of continuous improvement (CIP) is to be anchored also fail because of the tools required for this. With the A3 Report, for example, there are such tools. Just for clarity upfront, problem solutions, decision bases and strategies are presented on a sheet of paper in DIN A3 format. The A3 Report provides employees with a kind of template for which analysis and action steps must be taken when solving a problem. This process, in turn, is based on a systematic approach: the PDCA cycle.

The four phases of the PDCA cycle

Of all the quality improvement tools, the PDCA cycle is the most important. It describes the basics of an improvement process and divides it into four phases:

Phase 1: Plan

In this phase the problem and the actual state are described, the causes of the problem are analyzed and the target state is defined. In addition, measurements for reaching the target condition is defined.

Phase 2: Do (Implementation)

In the implementation phase, the predefined measures for achieving the target status are fixed.

Phase 3: Check

In the review phase, the experience gained and the results achieved in implementing the measures are reflected and the measures are readjusted if necessary.

Phase 4: Act

In this phase, the experience is gathered and the problem-solving process is evaluated and standards for future action are derived.

PDCA Cylce

Teams always go through this process when they have identified a problem or a relevant opportunity for an improvement. Then a new PDCA cycle is started with the aim of establishing a new standard in the company which serves as a basis for further improvements. The following case study shows how working with the PDCA cycle works.

The PDCA cycle explained using a case study

The management board of an electrical motor manufacturer has adopted a new strategy to further expand the company's quality leadership in electric motor production and increase customer satisfaction. To this end, the management team defined the following so-called breakthrough targets:

• The production processes must be state of the art

• The work must be based on the zero-defect principle

• The striving for continuous improvement (CIP) should be anchored among the employees

These goals have been broken down to all levels. At a meeting, the head of department pointed out to the group leader that the five pressing lines he supervised produce less than the target of 35k motors per day. The consequences: Supply bottlenecks and customer dissatisfaction. The group leader should now solve this problem. In accordance with the PDCA cycle, the following procedure was followed.

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PDCA Phase: Plan

The group leader analyzed the production figures of the past weeks. He found that the joining line supervised by the team leader only delivers an average of 32k motors per day instead of 35k. The team leader suspected that this was due to high line rejects. They then took a look at the sorted motors in the quarantine stock. The result: the labelling on almost all rejected motors are displaced or not readable.

The group leader asks the team leader what could be the cause of the problem. His assumption: "The printer is not running perfectly and the application process is not stable. A check of the incoming labels has proven that all material is in specification, so the failure has to be within the printing and application process. The team leader then looked at the scrap figures in the shift reports. It turned out that over 80 percent of the rejected motors are produced during the night shift.

So the group leader and the team leader observed the labelling process in the following night shift. They noticed that the labeling belt occasionally jams in the conveyor belt, which is why the labels are applied offset to the desired location. The team leader suspected that this was due to the fact that the printer mounting and so the printer location was in the wrong position, a further analysis has shown that a new employee has been placed in the night shift and he didn’t understand the correct setting and placement of the printer after exchanging the labeling roll. In addition, it came out that the cartridge has to be replaced after 24 hrs which also was usually coming to the night shift. So the root cause was clear.

The group leader then asked the team leader to formulate a target state for possible countermeasures. He knows through trainings that targets should follow the SMART rule, but on this topic mainly measurable. He wanted to achieve the target by training the new operator. Done deal.

PDCA Phase 2: Do

But the group leader was not satisfied with that. He asked the team leader if he knew exactly how the operator were going to change roles and cartridges if there was a standard operation instruction (SOI) of this process and how to train new operators. The team leader denied this.

In the following night shift, they both watched the change of roles and cartridges by experienced and inexperienced operators. The experienced operators made sure that the labels did not touch the floor during the change and that the printer is in the correct position after replacing the role. The inexperienced, on the other hand, often rubbed the labels on the floor and just pushed the printer in the station without checking the first parts after replacement. Dirt gradually collected in the label dispenser, causing the tape to jam from time to time and the incorrect position of the printer led to misplaced and crushed up labels which in the end of line led to the rejects of the motors.

The group leader asked the team leader and his team to consider possible countermeasures, prioritize them and draw up an action plan. The countermeasures were among others: 

1. 5S sessions at the end of each shift to restore cleanliness and order in the line

2. Installation of training matrix in order to know how is able to follow the process and how is experienced enough to train new operators

3. Install a Poka Yoke fixture to ensure a process stable positioning of the printer

4. Install a counter with light indication when the cartridge of the printer needs to be replaced after an evaluated amount of labels printed

Based on the prioritization, the team members drew up an action plan. They also agreed:

The current status of the project is always documented on the cell board of the labelling line for the next three months

The progress figures are reported in the daily shop floor meeting – not the team meeting of the cell. It has mgt. focus.

PDCA Phase 3: Check

In the following weeks, the team leader of the cell reported daily the figures and the impact of the measures on the outcome. They also defined further measures on the basis of their experience to date. For example, the machine is always stopped when the label tape reaches into the light barrier, caused by an air blast. The measure was to install a duct for the carrier tape of the labels into a bin placed under the line, easily accessible for the line clean up at the end of the shift.  As a result, the reject rate fell by almost 80 percent after three months. The initially formulated target of 40 percent fewer rejects was achieved.

PDCA Phase 4: Act

After this assessment, the group leader asked the team leader what he wanted to do with regard to standardization. He replied that he would prepare a written description of the optimal process "maintaining the label printer" as well as for training new operators. In addition, from now on he will carry out a daily process control in order to detect target/actual deviations earlier.

The group leader praised the team leader and asked him at the next team leader meeting to inform the team leaders of the four other production lines about the new standard and the findings in the PDCA problem-solving process so that they could learn from the experience. Him himself informed the head of the motor production department that the problem of insufficient motor production had been solved.

Hansei

The Japanese term of Hansei has the meaning to acknowledge your own mistake(s) and to strive for improvement. The term describes your personal ability of reflection and will to do better.

Hansei plays a big role when thinking about the continuous improvement process and specially the part of looking back and reflect of what could have gone better or where you as person did come short and have a potential lesson.

At Toyota, Hansei is a fixed part of their production system. The Hansei Assessment is held to have a deep review or personal reflection. Typically these assessments are conducted during milestones or at the end of a project during the lessons learned part. The results are communicated to the whole organization so that all can profit from the knowledge gained from this process. By this you will support your complete organization from repeating mistakes or even improve existing standards in order to prevent this from happening again.

You see Hansei can be seen as a crucial part of the organizational development and as heavy weight components for the continuous improvement process, KAIZEN activities and standardized work, as in the end it is up to humans to run your organization and we all make mistakes we can learn from.

In a Hansei assessment you have 4 Elements to analyze and the questions to find an answer.

Hansei Assessment

Implementation of 5S

If you want the short version just go here. Otherwise we will deep dive in this article on how to implement the 5S methodology in your organization. We will simply follow the 5 Steps and explain the topics.

1st S SEIRI = Sort out all unnecessary objects

• Unnecessary objects are all objects that are not needed for the current manufacturing processes (production, logistics, quality, and administration, etc.), that means, defective parts, unused material, material that has been written-off, all spare parts, non-utilized tables and so on

• Determine in advance, what is truly needed. This is helpful when dealing with statements such as: “That still can be used“, “That should be useful for something,“ etc.

• Remove all redundant objects or at least visually mark them so that everybody is aware that they are to be disposed of

• Unused objects should be concentrated in one marked closed area. The decision about those that can not be immediately liquidated, as whether to dispose of them, should be made by the person responsible within 2 weeks

Target: At the workplace are only objects essential for the current work in progress.

Red Tag Campaign

• Ask three questions for each separate object:

  • Is this object useful?

  • How many of these objects do we need?

  • Where should this object be stored?

• Don‘t support others in searching for excuses. Be fair – mark objects that should be removed in all divisions of the company

• Don‘t compromise! When in doubt - the rule applies: Get rid of it!

• If there are suggestions for improvement of the current manufacturing process, it is possible to “red tag“ even objects still in use

• Make sure that everybody understands what should be marked and why

Course of action and rules for the “Red Tag Campaign”

• Write on the tag why the marked object is not needed (Example: Surplus packing boxes; parts stored in boxes are not used any more)

• Contact Information about the person who made the decision that the object is superfluous (name and department)

• The person responsible for the object will be informed and their name will be entered on the “Red Tag”, and along with the agreed-upon date of removal (maximum 3 days), the action should be recorded (Example: The employee who recognized that the boxes are not used anymore, will inform the warehouse attendant and will appeal to him to verify if they are really not of use anymore. If it will be discovered that the object is still in use, the “Red Tag” will be removed. (For instance: The warehouse manager finds out that the boxes will be used to store other parts very soon)

• If the object will be classified among the superfluous, it must be removed within three days by the person who has the responsibility for this area. (For instance: Redundant storage boxes - person responsible for the warehouse). Afterwards the “Red Tag” can be liquidated

• Objects can be “Red Tagged” only in working areas of ones responsibility. The Shift Leader can issue “Red Tags” in the entire area they are responsible for

The “Red Tag” will be filled out by hand and attached to the unwanted object.

Examples of unwanted objects:

1 Defective products

• Faulty parts

• Rejects

2 Unnecessary objects

• Unused empty packaging

• Personal objects (on undefined places)

• Unneeded assembly sets

• Unused material (remaining bundles)

• Unused tools, auxiliary and production material

• Inventory no longer being used

• Surplus of manufactured components

2nd S SEITON = Clean-up and correct arrangement of needed objects

• After the removal of all unnecessary objects, remove all uncleanness, as new organization of areas for laying down objects or their storage can start only after everything is clean

• Each machine and each tool must have its designated place.

• Thoroughly deliberate about where you will store material, tools, and equipment

• Use colored markings (for instance stickers) to designate areas, cabinets, shelves, cupboards with shelves, important places, direction of work procedures, etc.

• With each object ask three key questions: Where? What? How many?

• Permanent storage of objects in

Targets:

• A place for each object and each object in its place

• Visual control and expedient detection of deviations

• Proper storage of all needed objects in the right place. These objects can then be found and used whenever needed

• Every thing has its own place and after its use is always returned to its place!

Think about color markings on the floor e.g.:

• Yellow = transportation zone

• White = raw material

• Green = finished goods

• Red = closed area/NOK parts

3rd S SEISO = Keeping the workplace tidy so as to achieve the already established standards through 5S

The purpose of the cleaning action is to remove all contamination from the workplace and to maintain it in order.

• For this purpose a cleaning schedule will be formulated that will determine what is to be cleaned, with what, and by whom

• If you discover any shortcomings or abnormalities during the cleaning process – mark them down

• All employees of the workplace / work area will participate in the cleaning process

• Keep records of the cleaning process, display visually “Red Tags,” as well as the clean-up time schedule of your workplace. Display results

• Define responsibilities with consideration even to the smallest work sections

• Be effective. Even a five-minute cleansing action can achieve a lot

Targets:

• Cleaner and safer workplace

• Achieving the already established standards

Cleanliness

• Cleanliness at the workplace must be observed, because a clean workplace is essential towards quality and safety at work

• If the workplace is not dirty it is not necessary to clean it

• Any kind of uncleanness and any kind of untidiness will be visible thanks to the initiation of a regular cleaning process – for instance, dusting, sweeping, and waste disposal

• Continuous usage of equipment

• Removal of all uncleanness and untidiness

• Prevention of working accidents

• Cleanliness means controlling, which implies that when cleaning a certain workplace, also check the state of the machinery, equipment, and working conditions

4th S SEIKETSU – Establishing regulations for work standards

SEIKETSU has the greatest importance of all 5S Steps.

• With this 5S Step the main focus is on three aspects:

1. No unnecessary objects

2. No messiness and

3. No uncleanliness

• Visual control is the first step towards discipline. The ideal workplace is that with which any eventual problems can be detected at first glance – any corrective measures can be immediately implemented

• Use control lists to control the 5S standard and to identify deviations from the defined 5S standards

• Conduct 5S audits with consideration to the situation on the individual work place. Attempt to identify deviations from the 5S standards

• Ask yourself “follow-up questions”, as for instance: Has the mess been cleaned up immediately? Is it clear who is supposed to do the job? Can the clean-up be done quickly? - and others

Targets:

• Securing the adherence to the 5S Standards

• Increasing the team responsibility on the work place

• Schedule of everyday clean-up

5th S SHITSUKE – Adherence to the Work standards and continuous improvement

• Discipline, namely, adherence to work standards is basically a question of personal attitude. For it to be easier, various teaching aids are used, e.g. Courses of the 5S Basics

• Use photographs, single-topic lectures, video-programs and presentations

• Constructive criticism is the foundation for proper 5S training

• Take pictures to document the status quo before and after

• The Team Leader functions as an example to the team. During his work he should focus on the goals of 5S, he should strive for a continuous improvement of quality and in this direction aim his training activity also

• Define together the measures for improvement and how to realize them.

• Regulations are better than criticism and a system is better than regulations

Targets:

• Promotion of this know-how in the entire company from top-to-bottom

• Well-organized work places that require only the minimum attention

Kaizen Manager

Kaizen Manager (Change Agents)

Kaizen Mangers are the people in your organization who initiate changes within your organization or support departments on the path along the continuous improvement process (CIP).

Change Agents are the key players in your organization to integrate new processes or improvement actions and simultaneously stabilize departments throughout a change or transformation process.

When talking about a Kaizen Manager or Change Agent he/she has the following duties with the support of the Change Leader:

• Support the change process by defining the program, participants, selecting suitable processes and defining the targeted state

• Set individual targets for responsible/affected persons

• Support responsible persons for each individual improvement process through coaching or scheduling exchange rounds with other key players. (To stay on track)

• Support the onboarding process for new people to the program

• Support on the transformation process from learning to actually doing

• Coordinate and support further expansion within departments

• Support on the transformation process of organizational culture

• Challenge status quo with fundamental questions on existing procedures

• Work closely with the heads of departments to anchor the new improvement culture across the complete organization

What ever it takes, it has to be clear that a sustainable change culture can only be established if all of your mid and top mgmt. themselves drive the integration of all their direct reports. The Kaizen Manager is the pure supportive function in the role of an internal consultant to guide the process.